Posts Tagged ‘inflation’

Negative Interest Rates

The European Central Bank announced this morning that they will cut their deposit rate from zero to -0.10%, making it the first major central bank to institute a negative rate. (For individuals saving money, the benchmark interest rate has also been lowered from 0.25% to 0.15%.) This sounds crazy, right? But the eurozone is looking […]

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Behavioral Economics: Money Illusion

A short topic this week, but an important one nonetheless. Money Illusion refers to the tendency of people to think of currency in nominal terms (its face value), rather than real terms (its purchasing power). Consider the following question presented to people: Suppose Adam, Ben, and Carl each received an inheritance of $200,000, and each […]

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